Sunday, September 2, 2012

Jim Willie: Careful With Those Gold Stocks!

In this great post on SilverDoctors.com, Jim Willie covers a broad range of topics, including the imminent demise of Morgan Stanley, and the possible rehypothecation of hundreds of thousands of accounts.  As if that's not scary enough, he also sees a number of large risks for mining shares.
"The hostile positions of miners versus the corporate firms is becoming stark and clear. The unfortunate outcome is that gold and silver mine output will surely go into worse decline. The Jackass forecast is that from the global mine output factor alone, the physical precious metal prices will rise, while the mining stock share prices will fall. Output risk joins jurisdiction risk and dilution risk for the mining companies. For every mining stock winner, expect 20 to 30 losers."
I'm counting on broad diversification to protect me from jurisdiction risk, but I have to admit that when it comes to dilution risk, I may be swimming naked.  Are you?

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